Senate Passes Bill Giving Bush
Power to Negotiate Trade Pacts

WASHINGTON -- After many near-defeats, the Senate passed sweeping trade legislation that will give President Bush the muscle to push for greater trade liberalization around the world.

The Bush administration has touted the bill as a boon to the U.S. economy, but the benefits won't be immediate. The first deals made possible by the legislation will be small, while the administration's larger ambitions for regional and world-wide tariff reductions face a slew of difficult challenges.

A Freer Hand on Trade

With the economy shaky, Republicans gave some ground on worker benefits to secure trade-negotiating authority for President Bush

World merchandise exports

Highlights of the trade bill

Mandates an up-or-down congressional vote on international trade pacts negotiated by the administration; bars amendments

Requires the president to consider environmental protection, labor rights and U.S. antidumping laws as negotiating objectives, but doesn't specify their inclusion in trade deals

Provides $1.2 billion a year in health insurance, other benefits to workers who lose jobs to foreign competition, including some indirectly hurt; adds farmers, ranchers to the list of those eligible

Grants automatic benefits to workers who lose jobs because their plants move to Africa, Jordan or the Caribbean; possible benefits for moves to China, Vietnam, Indonesia and elsewhere

Extends and expands through February 2006 trade breaks for Peru, Colombia, Ecuador and Bolivia to support antidrug efforts

Sources: World Trade Organization; Senate Finance Committee

Still, Senate passage of the so-called fast-track bill, 64-34, marks a victory for Mr. Bush, who is expected to sign the legislation next week. The bill should help the president burnish his free-trade credentials after his controversial steel-tariffs decision earlier this year, while giving him the steam to regain U.S. prestige on the international trade front.

Congress approved the trade package despite growing unease over free trade in many quarters. Representatives from textile districts in the South argued that reduced tariffs will further harm the blighted industry, while labor and environmental groups said fast-track will allow the president to craft agreements that could hurt U.S. workers and the environment. Fast track allows the president to negotiate trade pacts that Congress can approve or reject but not amend.

The victory didn't come cheaply for Mr. Bush, who shored up support in Congress by protecting the steel and lumber industries and boosting subsidies to farmers. Republicans also gave into demands that the bill include several unprecedented measures to help workers who lose their jobs to trade competition overseas.

Money for federal job retraining and temporary health-care benefits for trade-displaced workers will triple to about $1.2 billion a year. The bill also offers the first-ever wage insurance program, giving as much as $5,000 a year to older workers who end up taking lower-paying jobs. It also reinstates and expands trade benefits for Colombia, Peru, Ecuador and Bolivia.

Fast-track authority of the president lapsed in 1994, and attempts by President Clinton to regain it in 1997 and 1998 failed to gain congressional approval.

The weakness of the economy is one reason Mr. Bush succeeded where his predecessor failed: Senate Democrats weren't eager to give the president a tool that Republicans denied Mr. Clinton, but they didn't want to be blamed for sabotaging growth.

Promoters of the bill argue that other countries have gained an advantage. "The Congress finally looked in the mirror and realized that countries all around us were signing free-trade deals with each other, and that moving ahead with our own deals is crucial to the U.S. economy," said Thomas Donohue, president of the U.S. Chamber of Commerce.

A case in point is Chile. Three administrations have spoken of a free-trade agreement with Chile, but lack of fast track hindered talks. Yet Chile cut tariff-free deals with Mexico, Canada and the European Union, and U.S. exports to Chile slumped.

U.S. Trade Representative Robert Zoellick plans to use fast-track authority to craft bilateral trade pacts. There also are plans to extend a free-trade pact across the Americas. The big fish, though, is the global round of trade talks launched last year within the World Trade Organization.

The fast-track authority granted to Mr. Bush is more restrictive than that granted previously. The bill sets a list of negotiating objectives on labor and environmental rules, and seeks to keep negotiators from weakening laws meant to protect against unfair trade practices.